Policyholders in New Jersey with open Hurricane Sandy claims most likely received an interesting piece of mail in recent weeks: letters from their insurance carriers inviting them to participate in mediation to resolve their claims. This was probably a welcome invitation for many who have not heard from their carrier in a long time; they likely viewed it as a signal their carrier was ready to resolve their claim.

However, this is not likely the case. Rather, the Commissioner of the New Jersey Department of Banking and Insurance created a mandatory mediation program in which licensed insurance carriers are required to participate. The letters to policyholders are required under Bulletin No. 13-07. I am not looking to shatter the hopes of anyone who believes their insurance carrier has changed its tune, but I do not believe the mediation program is going to do much to alter the positions taken by many insurance carriers.

Most policyholders are unfamiliar with the claims process and mediation and will likely think the mediator is there to protect their interests in the claims process. This is simply not the case. Mediation is a proceeding where a neutral third party attempts to facilitate a settlement between the policyholder and their carrier. This requires both sides to present their positions to the mediator. A mediator is not there to extract information or infer anything not supported by the submissions of the parties. The policyholder is responsible for presenting all aspects of a claim to the mediator.

Much like the original claims process, presentation of a claim in mediation can be a highly technical matter. Most policyholders are not in a position to know how to best present their claims. This is where professionals, public adjusters or attorneys, are essential to making sure a claim is property presented. It is imperative that insureds do not misconstrue the invitation to mediation as an indication they do not need a claims professional on their side. A professional is the only way to make certain your claim is properly adjusted. Before proceeding to mediation on your Hurricane Sandy claim, it is in your best interest to speak to a claims professional to determine your best course of action.